Roofing & Sheet Metal Services, Inc. v. La Quinta Motor Inns, Inc.

• Decision Date: 21 October 1982
• Docket Number: No. 81-7639,81-7639
• Citation: 689 F.2d 982
• Parties: ROOFING & SHEET METAL SERVICES, INC., Plaintiff-Appellant, v. LA QUINTA MOTOR INNS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 982

689 F.2d 982

ROOFING & SHEET METAL SERVICES, INC., Plaintiff-Appellant, v. LA QUINTA MOTOR INNS, INC., Defendant-Appellee.

No. 81-7639.

United States Court of Appeals, Eleventh Circuit.

Oct. 21, 1982.

Hand, Arendall, Bedsole, Greaves & Johnston, J. Hodge Alves, III, Mobile, Ala., A. Wayne Davis, Little Rock, Ark., L. Lynn Hogue, College of Law, Ga. State Univ., for plaintiff-appellant.

James Tarlton, III, Gregory C. Buffalow, Mobile, Ala., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Alabama.

Before RONEY and HATCHETT, Circuit Judges, and WISDOM, ^* Senior Circuit Judge.

WISDOM, Circuit Judge:

This is a suit for breach of contract. Federal subject matter jurisdiction derives from the parties' diversity of citizenship. 28 U.S.C. § 1332(a)(1). The plaintiff, Roofing & Sheet Metal Services, Inc. (Roofing), appeals from an order of the United States District Court for the Southern District of Alabama, granting summary judgment for the defendant, LaQuinta Motor Inns, Inc. (LaQuinta). Roofing also challenges an earlier order transferring the case to that court from the Western District of Arkansas, the forum in which it initially sued. To the extent Roofing asks us to review the transfer order, we lack appellate jurisdiction and dismiss the appeal. Because we find, on the merits, that LaQuinta has not established its right to judgment as a matter of law, we vacate the summary judgment and remand for further proceedings.

I.

Roofing brought this action in the United States District Court for the Western District of Arkansas on November 3, 1980, alleging that LaQuinta had failed to pay $23,310 of $39,700 due for materials and service under a contract to reroof LaQuinta's motor inn in Mobile, Alabama.

Roofing is incorporated under the laws of Arkansas and has its principal place of business in Pulaski County, Arkansas. LaQuinta is incorporated under the laws of Texas and owns property in several states, including Arkansas. According to Roofing, the contract giving rise to its cause of action was negotiated and executed at the LaQuinta Motor Inn in Pulaski County, Arkansas. LaQuinta contends that its agent, Paul Jarrell, signed the contract in San Antonio, Texas. This factual dispute is of critical importance. See Part III of this opinion.

On November 24, 1980, LaQuinta moved to dismiss the action, alleging that the district court lacked personal jurisdiction, that the Western District of Arkansas was an inconvenient forum, and that the contract is unenforceable because Roofing has not qualified to do business in Alabama as required by Ala.Code §§ 10-2-254, 10-2-270 (1975), ¹ or obtained a contractor's license, as required by Ala.Code § 40-12-84 (1975). ² In its response to the motion, Roofing alleged, concerning personal jurisdiction, that LaQuinta had a registered agent for service of process in Arkansas and that the cause of action arose from a contract executed in Arkansas. Concerning venue in Arkansas, Roofing argued that LaQuinta had not adduced "the necessary proof of substantial hardship" that would require dismissal. Roofing alleged, further, that it had complied with Alabama's qualification and licensing requirements.

Roofing requested a hearing on the motion to dismiss, but the district court disposed of it without one. The court expressed "serious reservations concerning the dismissal of the complaint on jurisdictional grounds". It found, however, that Alabama would be a more convenient forum for trial on the merits, since the case would "require investigation into the work performed in Alabama and resolution of legal questions under Alabama law." Treating LaQuinta's motion as one to transfer to a more convenient forum, the court transferred the case to the Southern District of Alabama and did not consider LaQuinta's arguments concerning the Alabama licensing and qualification statutes.

LaQuinta raised these arguments again in the district court in Alabama, in a motion for summary judgment. The motion adopted by reference the affidavits and exhibits submitted with the earlier motion to dismiss. Roofing filed no response to the motion for summary judgment, and on June 30, 1981, the district court granted the motion, finding that Roofing had neither qualified to do business in Alabama as a foreign corporation nor obtained a contractor's license. On July 20, 1981, Roofing filed a motion for an extension of time in which to file a motion for reconsideration or a new trial under Fed.R.Civ.P. 59. The court denied the motion, relying on Fed.R.Civ.P. 6(b), ³ and Roofing brought this appeal.

Roofing has apparently abandoned its contention that it was qualified and licensed to do business in Alabama. ⁴ It argues, rather, that the Alabama licensing and qualification statutes do not govern the case, because the district court was bound by the choice of law rules of Arkansas, the initial forum, and Arkansas courts would not apply the Alabama statutes. Roofing also challenges the order of the district court in Arkansas transferring the case, and we will address this challenge first.

We note at the outset that decisions of the Fifth Circuit prior to October 1, 1981 are binding precedent in this Circuit. Bonner v. City of Prichard, 11 Cir. 1981, 661 F.2d 1206, 1207.

II. The Transfer Order

The power of the Arkansas district court to transfer the case to Alabama derives from 28 U.S.C. § 1404(a), which provides, "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought". The determination whether the circumstances warrant transfer under § 1404(a) is "peculiarly one for the exercise of judgment by those in daily proximity to these delicate problems of trial litigation". Time, Inc. v. Manning, 5 Cir. 1966, 366 F.2d 690, 699 (quoting Lykes Brothers Steamship Co. v. Sugarman, 2 Cir. 1958, 272 F.2d 679, 680). Accordingly, the decision whether to transfer a case is left to the sound discretion of the district court and is reviewable only for an abuse of that discretion. In re McDonnell-Douglas Corp., 5 Cir. 1981, 647 F.2d 515, 516; Marbury-Pattillo Construction Co. v. Bayside Warehouse Co., 5 Cir. 1974, 490 F.2d 155, 157-58. See also 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3847, at 235-37 (1976). The appellant contends that the order transferring the case was an abuse of discretion, because it was entered without a hearing and because the circumstances did not justify it. The appellant also contends that the court in Arkansas abused its discretion by suggesting, in the order, that Alabama law governs the case; this suggestion, according to the appellant, tainted the judgment of the transferee court in Alabama. We do not reach the merits of these contentions, however, because we lack jurisdiction to review the decision of a district court embraced by the Eighth Circuit.

Congress has not given us jurisdiction to review decisions of district courts outside this Circuit. Specifically, as 28 U.S.C. § 1294 provides, "Appeals from reviewable decisions of district and territorial courts shall be taken to the courts of appeals as follows: (1) From a district court of the United States to the court of appeals for the circuit embracing the district". 28 U.S.C. § 1294(1). ⁵ No relevant statute confers broader territorial jurisdiction than § 1294(1). ⁶ Accordingly, the Fifth Circuit has held that it lacks appellate jurisdiction to review the decision of a district court in another circuit. In re Corrugated Container Anti-Trust Litigation, 5 Cir. 1980, 620 F.2d 1086, 1090-91, cert. denied, 1981, 449 U.S. 1102, 101 S.Ct. 897, 66 L.Ed.2d 827; accord, General Electric Co. v. Byrne, 7 Cir. 1979, 611 F.2d 670, 672 (per curiam); MacNeil Brothers v. Cohen, 1 Cir. 1959, 264 F.2d 186, 187 (per curiam) (dictum).

The Corrugated Container case did not involve an order transferring a case under § 1404(a); it involved a contempt order by a judge of the United States District Court for the Southern District of Texas, acting as a judge of the United States District Court for the Southern District of New York, pursuant to 28 U.S.C. § 1407(b) in the context of multidistrict litigation. We see no principled basis for distinguishing that case, however, and both the Fourth and Seventh Circuits have rejected, on jurisdictional grounds, challenges to transfer orders by district courts in other circuits. Linnell v. Sloan, 4 Cir. 1980, 636 F.2d 65, 67; Illinois Tool Works, Inc. v. Sweetheart Plastics, Inc., 7 Cir. 1971, 436 F.2d 1180, 1188, cert. dismissed, 403 U.S. 942, 91 S.Ct. 2270, 29 L.Ed.2d 722. As the District of Columbia Circuit has said, when a case is transferred between circuits, "it is well established that a transferee court cannot directly review the transfer order itself". Starnes v. McGuire, D.C.Cir.1974, 512 F.2d 918, 924 (en banc); ⁷ accord, Technitrol v. McManus, 8 Cir. 1968, 405 F.2d 84, 87, cert. denied, 1969, 394 U.S. 997, 89 S.Ct. 1591, 22 L.Ed.2d 775. Although the Second and Ninth Circuits have expressed a contrary view, American Fidelity Fire Insurance Co. v. United States District Court, 9 Cir. 1976, 538 F.2d 1371, 1377 n.4; Magnetic Engineering & Manufacturing Co. v. Dings Manufacturing Co., 2 Cir. 1950, 178 F.2d 866, 869 (Hand, J.), we know of no case in which either circuit, or any other, has in fact reviewed a transfer order issued by a district court in another circuit. ⁸ Leading commentators agree that a transfer between circuits is not reviewable by the court of appeals for the transferee circuit. See 9 J. Moore, B. Ward, & J. Lucas, Moore's Federal Practice, P 110.13(6), at 177-79 (2d ed. 1982); 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3846, at 230, § 3855 at 302 (1976).

The appellant argues that the present appeal is its only opportunity for review of the...